Building

Resilience in
Chemical
Supply Chains

©2021 A.P. Moller – Maersk

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Building Resilience in Chemical Supply Chains
Executive
Summary
Chemicals can be found in almost everything
around us. In fact, 96% of all manufactured goods
contain a chemical - from medicines, to our cars
and even the device you are reading this from.
The chemical industry has been a major contributor
to businesses and global trade growth for decades
and will remain so for many more to come. It
contributes approximately 5 trillion USD to the
global GDP and has created more than 120 million
jobs. However, the industry has been hit hard
recently by trade barriers, increased levels of
protectionism, and the global COVID-19 pandemic.
Evidently, the need for a resilient supply chain in the
chemical industry has never been greater. In this
report, we speak with Maersk’s Henrik Wretensjoe,
Global Vertical Head of Chemicals as well as Satoshi
Akasaka, Vertical Head of Chemicals and Ian Kaw,
Vertical Associate Director of Chemicals for Thailand,
Malaysia and Singapore area, to draw invaluable
insights and trends within the industry.
We would like to offer special thanks to Peter Crowe,
APAC Head of Logistics at Syngenta, who sheds
light on how one of the world’s leading agriculture
companies managed to digitalise their supply chain
and collaborate with Maersk as their largest 4PL to
achieve their business objectives even in the face of
a global pandemic.
Henrik Wretensjoe Satoshi Akasaka
Global Vertical Head Vertical Head of
of Chemicals, Chemicals, Thailand,
A.P. Moller – Maersk Malaysia and Singapore,
A.P. Moller – Maersk
Key learnings:
• Raw materials account for 96% of
all manufactured goods. It would be
absolutely vital for Chemical companies
to provide the “upstream” supply
chain visibility to their customers in
the “downstream” such as technology,
automotive, FMCG, and retail sectors.
In fact, many of these customers raise
raw material visibility as one of the pain
points in their supply chains
• The 6 pillars and the 4 mega trends
in the Chemical industry foster the
importance of a resilient supply chain
and we recommend 3 main strategies to
build such business models
• The 2 case studies show 2 different
resilient supply chain models for
specialty chemicals and petrochemicals
sectors and how Maersk Chemicals
Solutions have supported the initiatives
Peter Crowe Ian Kaw
Head of Logistics Vertical Associate Director
Asia Pacific, Syngenta of Chemicals, Thailand,
Malaysia and Singapore,
A.P. Moller Maersk
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Building Resilience in Chemical Supply Chains

Fostering
Resilience
Henrik Wretensjoe, Global Chemical Vertical
Head here at A.P. Moller – Maersk defines
a resilient supply chain as having the necessary
visibility as a foundation to make the right decisions,
the agility to shift sourcing, manufacturing or
distribution with speed once a disruptive event
calls for it and the right level of buffers to dampen
unforeseen shocks.

Many surveys done with supply chain leaders

globally indicate that the general perception is
that their companies do not have the right level
of resilience. How should companies prepare
themselves to come out stronger with improved
resilience for the next disruption?

Wretensjoe suggests companies to

consider these 6 pillars when designing
a more resilient supply chain:

1. Review your manufacturing and 2. Single-sourcing vs Multi-sourcing

sourcing network
• Is your supply chain diversified enough when
it comes to geographical footprint? Do you have
backup manufacturing capacity if certain assets
cannot be utilised? What if your customers are
moving their production to a new location as a
result of the trade tensions between countries?
Can you still supply them from where your assets
are located?
• Similarly, the base of suppliers can be reviewed
as well. Are they too clustered that all of them
will face the same constraints due to major
logistic bottlenecks, such as a lack of shipping
containers?
• The pendulum for the last few decades has swung
more towards cost optimisation, often exposing high
risks with too few or maybe even a single selected
supplier to save on cost.
• Even if it is a dual sourcing setup, how easily can
you activate a backup supplier and how do you
ensure they remain committed to support you even
if they are primarily a backup? An example is the
Earthquake in Japan 2011 and the Fukushima nuclear
disaster that halted supply chains across industries
ranging from chemicals to electronics and automotive
and triggered many supply chain managers to review
how to look at risks.
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Building Resilience in Chemical Supply Chains
3. Inventory management and general
buffers in the supply chain
• How tightly are safety stock levels steered?
Are manufacturing assets sweated to the max or
are there buffers that could be leveraged? The
immense pressures to optimise working capital
has probably meant that buffers are generally
steered to minimal levels which means it is
difficult to deal with shocks.
4. Nearshoring for increased control
and reduced risks
• While feedstock and material access might
dictate the location for most manufacturing sites
rather than being next door with the customers,
it remains a factor to review when it comes to
resilience.
• Moving cargo over long distances with handovers
and dependencies all adds up to supply risk,
regardless of it being inbound or outbound. It should
not be limited to only manufacturing but also how
the distribution is set up: global vs regional vs local.
It adds cost and complexity but grants more control
by having the products available closer to where the
customer base is.
“Resilient supply chains can boost revenue growth,
improve customer satisfaction while balancing risks
and cash flow impacts.”
Henrik Wretensjoe,
Global Vertical Head of Chemicals,
A.P. Moller – Maersk
5. Visibility of your end-to-end logistics
• The right decisions can only be made if you have
access to the right level of information, being able
to predict, plan, sense and act with agility. It is of
immense importance to have end-to-end visibility
of the status of the events in your supply chain
— the closer to real time, the better. Leveraging
the power of data, connecting and integrating with
both suppliers, customers and logistics service
providers to move a rather linear supply chain
network with limited cooperation into a more
collaborative one.
6. Review your partners in the network
from a service level agreement
perspective
• You can expect stable performances from your
suppliers and supply chain partners in an ordinary
day, but what can you expect in times of demand
or supply shocks or logistical bottlenecks? Do
you have the right partners engaged and a clear
understanding of what to expect in times of
disruptions? This could be the obvious timing to
review the balance of the decisive factors behind
your sourcing decisions chain network with limited
cooperation into a more collaborative one.
Resilient supply chains can boost revenue growth,
improve customer satisfaction while balancing risks
and cash flow impacts. The companies investing today
will be best positioned for tomorrow’s disruptive
events which can be foreseen by these mega trends.
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Building Resilience in Chemical Supply Chains
The Four Key Mega Trends
1. Supply chain digitisation
The rate of development here is rapid. With the
aim of creating transparency, reducing manual
processes, integrating and connecting for better
efficiency, and leveraging data for smarter
decisions. Automation, artificial intelligence, IoT,
paperless trade and blockchain, will impact how
future supply chain ecosystems are set up.
2. Sustainable supply chains
Customers are demanding green products that
need to be supported by green supply chains. Even
in a B2B2B industry like chemical, this demand will
quickly propagate backwards from the consumer.
Start thinking about what modes of transport are
used, how is cargo packed and with what material.
See if you can also report your carbon footprint if
your customers ask for it.
3. Circular supply chains
There is a move from linear supply chains to
more circular ones. The supply chains of reused
materials are getting integrated into the new
produced ones. Recycling or refurbishment are
new norms and customers also favour suppliers
that take these into consideration.
4. Agile supply chains
The supply chain of the future is built around
agility as a key competitive edge. Flexibility,
rapid responses to changes from customers, the
market or the circumstances around you are more
important than ever.
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Building Resilience in Chemical Supply Chains

The 3 main strategies

to build a Resilient
Supply Chain

To better understand the 6 Pillars and 4 Mega

Trends, Satoshi Akasaka, Chemical Vertical Head for
Maersk Thailand, Malaysia and Singapore categorises
them into three main strategies:

1. Select a dependable logistics partner

The first key is to work with resilient logistics

partners who possess:
• In-depth understanding of your business
• Expertise in international/local regulations
• Global coverage
• Financial stability
• Flexible business implementation skill
• Robust Business Continuity Plans
The closest frameworks that businesses can
utilise to address these needs would be the 4PL
or Control Tower models which Maersk offers.
By integrating them as part of your business
process outsourcing, your supply chain can
be backed by a resilient logistics partner and
a dedicated logistics team.
2. Set up a hub closer to your customers
Being near your customers has been increasingly
important due to highly volatile markets and
demand surges for specific goods caused by
lockdowns. This has also caused the bullwhip
effect to fluctuate even more. For chemical
companies, it has become tremendously
challenging as they are one of the most upstream
players for raw materials, which leads to them
ending up overstocking in one location and stock
outing in another.
Manufactuer

Distributor
Retailer
“In order to mitigate such impact, we believe it Customer
is vital to set up a hub near your customers to
improve service level with shorter lead time and
optimize safety stock level by aggregating the
demand.”

Satoshi Akasaka, Product Order

Vertical Head of Chemicals, Thailand, Malaysia
and Singapore, A.P. Moller – Maersk

The bullwhip effect on the supply chain occurs when changes

in consumer demand causes the companies in a supply chain
to order more goods to meet the new demand.
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Building Resilience in Chemical Supply Chains

The suitable solutions would be the Hub-in-Transit and Regional Distribution Centre.

Hub-in-Transit

Our own terminal network can be found globally, and we also operate Flex Hub services in Tanjung Pelepas,
Malaysia, Sri Lanka, Oman, Egypt, Morocco and Spain.

Flex Hub Locations

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Building Resilience in Chemical Supply Chains

If the dwell time in the storage location is longer

and the business requires value-added services on
the cargo itself, the solution is to set up Regional DC
(Distribution Centre) in Bonded Warehouses. Maersk
offers such solutions in Tanjung Pelepas, Malaysia
and many other APAC locations as well.

Regional Distribution Centre

3. Become a resilient partner for

your customers

Although the bullwhip curve for companies in retail,
technology, automotive and FMCG industries might
not be as steep as those in the chemical field, visibility
remains critical for their production planning.
Since the COVID-19 pandemic, more retail, technology,
automotive and FMCG customers have expressed the
importance of visibility of their raw material for crucial
production planning. Especially since they are major
suppliers to these sectors, it further emphasises the
need for chemical companies to provide such visibility
to their customers for improved service level and to
potentially differentiate from the competition.
Maersk’s TradeLens - a block chain solution and a
joint venture with IBM - offers real time cargo and
document visibility by partnering with ecosystem
players such as shipping lines, terminals, truckers,
customs and even banks.
The Maersk 4PL also offers HIT visibility dashboard
which is E2E visibility on SKU/grade level, and
Sourcing APP.
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Building Resilience in Chemical Supply Chains

Best Practice:
The Evolution of
Syngenta’s Supply Chain
In this report, we speak with Peter Crowe, the Head
of Logistics for Syngenta Asia Pacific on how the
global agricultural technology company managed
to bring its complex supply chain to greater
heights with digitisation, efficiency and resilience.
With a highly complex supply chain, they initially
had very limited visibility on the whereabouts on
their cargo and the specific cost of their logistics.
The complex supply chain undeniably came with
a complex problem.

Being a global leader in agriculture, Syngenta’s aim
is to help feed the world while taking care of the
planet. They are present in 90 countries, supported
by 89 production and supply sites, 116 R&D sites
and 28,000 committed employees around the
world.
In 2015, Syngenta went on a mission to digitise their
supply chain and appoint a supply chain expert to help
them feed the world both safely and sustainably. They
needed an evolution, not a revolution for their supply
chain as transforming their complex system overnight
would come with unnecessary risks.

Syngenta also produces a plethora of crop

protection products which are faced with
heavy regulations that affect imports, exports,
manufacturing and even the customer’s
application of the product.
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Building Resilience in Chemical Supply Chains

Their mission came with three phases:

Plan the Growth

Prepare the Ecosystem

Empower the People

To digitise their logistics and gain full visibility on

their shipments, they utilised Infor Nexus (formerly
known as GT Nexus). Syngenta also appointed several
4PL providers, with Maersk being the largest, to
“When choosing our 4PL provider, we had to find a
handle all global sea and airfreight shipments.
partner who could work with us to solve problems
when the time came and would go the extra mile
The setup with Maersk was end-to-end, keeping to
for us. Maersk not only convinced us but confirmed
our philosophy of going All the Way. While running
with high-ranking executives going out of their way
their global sea and airfreight tender, we also
to help us. Now we can safely say that we are in good
processed procurements for them, making every
shape.”
shipment an efficient and seamless one.
Peter Crowe,
Our committed service paired with their robust
Head of Logistics Asia Pacific, Syngenta
digital system now provides Syngenta the visibility
they never had before. From the confirmation
of pick up to the arrival at the customer’s door, How did it help Syngenta to serve
their new system also provides a multitude of
customers during the pandemic?
milestones throughout the journey. Any deviations
from plans are attached to these milestones
which allows Syngenta to react accordingly. With Utilising the GTN data was essential throughout the
an abundance of reporting possibilities including crisis as it gave them full visibility of upcoming and
CO2 footprint and detailed costs, they now work pending orders as well as the ability to communicate
with Maersk to build initiatives to constantly evolve directions clearly with us on their priorities.Despite
their supply chain. the adversities brought on by COVID-19, Sygenta
managed to sail through the storm. Mr. Crowe
credits this success to the strong visibility that the
setup has been providing for years and continues
to bring plant potential to life.
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Building Resilience in Chemical Supply Chains

Case Study:
Driving supply chain
efficiency and visibility
Associate Director for Chemical Vertical, Our 4PL’s scope-of-service covers
Ian Kaw, shares how Maersk has also worked the following main functions:
with a top-tiered global petrochemical company
to enable supply chain resilience as well as the
ability to gain control and optimise costs across Sourcing of empty containers from
the end-to-end logistics flow. The company multiple Ocean carriers
produces polymers at its multiple cracker plants
located in the Middle East and Asia, with its total Transport empty containers and have
tonnage in multiple millions. them loaded at the plants

As a global 4PL provider, we put in place multiple

Control Towers to cover different geographies
that span from Bahrain, Dubai, Saudi, South
Korea, Malaysia, and a large back office team
in India. As seen from the on-going COVID-19
pandemic, different countries face varied levels
of lockdowns and restrictions, but the setup we
built allows teams in multiple countries to cover
for each other when needed.
With a Hub-in-Transit inventory optimisation
plan, we transport the laden containers to
one of the 6 HIT Hubs or Warehouses, which
are setup across UAE and Asia
Upon receiving the final leg shipment order,
based on RETA, the 4PL / Booking Services
Team will proceed with carrier bookings, SI
submissions, documentations including CHB

Freight Invoices from Ocean Carriers are

audited before payment
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Building Resilience in Chemical Supply Chains
Maersk Lead Logistics Platform
As all activities are executed via our Lead Logistics
platform, it offers a full E2E visibility from PO
creations, ocean carriers booking, inventory at each
hub, booking status, track-and-trace to final leg
delivery at destination ports.
The platform also allows the 4PL Teams and shipper,
to collaborate strategically on managing exceptions,
measure performance of other 3PL partners across
the supply chain, minimise COGS, execute delivery
orders on-time, and identify opportunities for
continuous improvement.
With the near shoring approach, HUBs are setup
across different locations. When a purchase order
arrives, our Sourcing App functions as the “digital
brain” allowing the shipper and 4PL Team to view
important information such as:
Location of stock being Transit time and cost
held in each hub per ton to ship
The app features a robust algorithm to run various
scenario plans that cater to cost, transit-time
or any other factors the shipper prioritises. We
also have a default plan that is automatically
recommended but with the impact of the
pandemic, we saw more manual overwrites kick in.
Our Value
In summary, collaboration and operating on a single
digital platform are key to building a resilient supply
chain. But most importantly, data is king in driving
every decision.
While supply chains, circumstances, target
markets and 3PLs are prone to change over time,
control towers, supporting platforms and existing
processes must be flexible to accommodate such
developments.
With an adaptable architecture we can achieve:
• Improved service level
• Minimised COGS
• Reduced expediting costs
• Minimised lost sales
• Achieved revenue and profit growth
“The app features a robust algorithm to run various
scenario plans that cater for cost, transit-time or any
other factors the shipper prioritises. We also have
a default plan that is automatically recommended
but with the impact of the pandemic, we saw more
manual overwrites kick in.”
Ian Kaw,
Vertical Associate Director of Chemicals, Thailand,
Malaysia and Singapore, A.P. Moller Maersk
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Building Resilience in Chemical Supply Chains

Insights from
our experts
Q: What are your thoughts about the
trade-off between Resilience and Efficiency?

Henrik: It cannot be either or. It will always be a

mix of the two. In the past couple of years, most
companies focus more on having an efficient, lean
and cost-effective supply chain rather than a resilient
one. However, I think companies will soon be forced
to adopt both strategies to deliver an efficient and
resilient supply chain. That can translate to different
priorities regarding the 6 pillars depending on your
industry and even the type of chemical company.

Satoshi: To add on, I think it is important to also

have multiple options when you are building supply
chain resilience. For example, have your goods placed
on three different carriers across three different
alliances in case one gets cyber-attacked or delayed
by unforeseen circumstances. You can even go
beyond that and have a variety of transportation
modes like intercontinental rail and airfreight
in the mix.

Peter: I agree, I do not think there needs to be a

trade-off. You can have a resilient and efficient
supply chain which I consider Syngenta to possess.
To us, resilience means having the visibility which
makes the whole chain efficient too as it gives you
a better perspective of what needs to be accom-
plished.

Q: How is Maersk doing with

sustainable logistics?

Satoshi: Maersk has a dedicated sustainability
team who are behind the many initiatives taking
place right now. The most exciting was in December
2018 when Maersk announced its target to produce
zero CO2 emissions from operations by 2050.
We are currently incorporating that into our ocean
transportation and are working with many different
partners to achieve this goal. We are also testing
many innovations such as biofuels, formed a
partnership with The Ocean Cleanup in a unique
mission to remove plastics from our oceans and are
working on a Maersk C02 dashboard for our
customers.
Henrik: To add on, I think the most important
aspect is to know what your current sustainability
footprints are. Without this, it will be highly
challenging to drive improvements. The Maersk
C02 dashboard Satoshi-san mentioned will help
our customers in a 4PL scope to align the way CO2
emissions are presented because a challenge in this
space is the many different standards.
By standardising the format, it allows you to
compare sustainability data fairly and make
more informed decisions for improvements.
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Building Resilience in Chemical Supply Chains

Q: COVID-19 has impacted industries
to focus on reducing cost and increasing
efficiency. How will this affect initiatives
for sustainability in the short- and
long-term future?
Henrik: There is indeed an immense cost-pressure
on the chemical industry, but the importance
of sustainability will not fade out. It is a global
challenge and I do not think there is a company
that can neglect sustainability to reduce cost or
else they might lose out in the market. So, every
company needs to carefully consider what they
can do to be part of a sustainable future.
Q: How does supply chain visibility
impact resilience?
Ian: The fundamentals of visibility is all about DATA.
Data must be designed with a business purpose;
cleaned, harmonised, accurate, updated, and always
available. It also needs to be available through a
platform, not excel. To be agile, the control towers
and decision makers should not be hopping between
multiple systems, which is surprisingly common in
many companies. As we know, scenario planning is
predictive and supported by accurate availability of
data.
So, when a pandemic hit, the supply chain will enter
a fierce fire-fighting mode which Syngenta did. In
such situations, having a powerful platform to view
accurate data will help businesses make better
decisions. For example, if a shipment will be delayed,
it carries many crucial implications. To make better
decisions, one needs to have an overall view of the
inventory across multiple storage hubs and supply
networks. As you can see, visibility is critical in
regular situations, but more importantly, during
a global pandemic.
All supply chain systems are planned to work,
but most pitfalls occur from human errors. So,
companies need to appoint the right stakeholders
to drive projects.
Peter: An example of this would bring us back to
2017 when Maersk was unfortunately hit by the
NotPetya cyber-attacks. Syngenta was not hit and
could still carry on working with Maersk because the
visibility platform that was put in place. Although we
had to coordinate with Maersk through alternative
means such as phone calls and private servers, the
visibility we had was the epitome of resilience in
trying times.
Q: Syngenta has a whopping 95% on-time
delivery. Has it always been this successful?
Peter: No, we had a rough start at the beginning
as we were constantly changing work processes
and SOPs. But we did not select our 4PL partners
solely based on a budget. We had to ask ourselves
who do we feel can solve problems when issues
arise and who do we feel are willing to go the
extra mile. DAMCO (now merged with Maersk)
checked all the boxes and when things did not run
as smoothly at the beginning, the CEO went out of
his way to help resolve the issues. So, it validated our
decision to trust a reliable partner like Maersk. Now
we can confidently say that we are in good shape.

All projects are planned to work, but most pitfalls

occur from human errors. So, companies need to
appoint the right stakeholders to drive projects.
During a disruption, as in the current pandemic,
supply chain goes into fire-fighting mode, and
exceptions begin to soar. In such a situation, a robust
supply chain visibility platform with accurate data
and status updates is paramount.

Knowing a shipment is not going to arrive on time

has all sorts of implications. Every subsequent deci-
sion made has a significant impact on service level
and financially.
©2021 A.P. Moller – Maersk